Solar industry needs sustained stability to flourish

The solar industry has been surrounded by a cloud of uncertainty for the last few months and the Government has been consistently urged to make the feed-in tariff more straight forward. By doing so, it would ease customer worries and ensure solar panels remain one of the most used energy sources in the country.

How solar’s feed-in tariff has changed

Solar’s feed-in tariff scheme launched in April 2010, as an incentive for homeowners and businesses to invest in renewable energy. Because of the scheme the industry has seen 41 times more installations around the UK. This has transformed the energy output from 26MW to 1GW.

But the Government hadn’t planned for such a wide uptake. With the financial savings and profits available, many more than expected were installing solar panels and generating their own electricity. And this forced the Government’s hand as they slashed the feed-in tariff in half, from 43.3p/kWh to just 21p.

Of course, the sudden announcement resulted in plenty of legal challenges from environmental groups and solar companies, who were angry with the Government’s sudden cuts. When the Coalition had vowed to be the greenest Government ever, this seemed an erratic and unclear decision.

But essentially, these appeals against the Government just prolonged the uncertainty in the industry, leading into 2012. It left homeowners and businesses unsure what the feed-in tariff rate was and how much profit there was to be made from investing in solar panels.

However, the Government’s mixed messages have continued and after solar panels reached a 1GW capacity, it was announced there would be raised ambitions for solar power in the UK. In fact, by the end of the decade 22GW of solar power have been targeted – which equals solar panels on four million properties.

Addressing the solar panel uncertainty

The confusion on the feed-in tariff should now have settled, after the March 3 deadline passed by. Homes that installed solar panels between December 12 and March 3 could receive the higher tariff rate depending on the outcome of the Supreme Court appeal.

But as that date has passed, homes will be entitled to the 21p/kWh rate, which still brings in a fantastic profit over the 25-year life expectancy. And of course, even if you move home, the solar panels will increase your property’s value

By tying the solar tariff into the Green Deal as well, the Government have tried to further secure the tariff’s future. The Green Deal allows firms to offer energy efficiency improvements, which will be paid off in monthly instalments.

From April 1, homes that don’t meet an Energy Performance Certificate rating of level D or above won’t be eligible for the full tariff. Making your home energy efficient, with improvements such as a new boiler or double glazing would cut your bills and make you eligible for the full rate.

The Government have said that making these solar cuts will ensure the feed-in tariff is available to more people. They’ve backed up this stance, saying there’ll be two and a half times as many installations than first planned, by 2015.

They have also made aware the point that the cuts will be kept in line with the falling price of solar panels, which will only drop over the years. Because of the uptake in solar panels, the initial costs of installation have dropped, meaning tariff rates have also reduced.

So even though the feed-in tariff has been reduced, solar panels are still a great way of producing free electricity. The tariff allows you to make a profit close to 15,000 over the 25 years, giving you free electricity.

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